Daily-Elliott-wave-analysis-12-30-16- the choice for GBPUSD, DOW setup to fall.
Current wave 3 down – below parity.
My Bias: short in wave 3 blue.
Wave Structure: downward impulse wave 1, 2 blue
Short term wave count: lower in wave 3 green
Long term wave count: lower in wave 3 blue
Important risk events: EUR: Spanish Manufacturing PMI
EURUSD is sitting in an interesting position after todays trade.
The initial target of 1.0520 was met and blown through, with a spike in the overnight trade.
Since the high the price has dropped quite impulsively,
I have labelled the decline as a possible ‘i,ii’ sequence to the downside.
so wave iii brown could be on the horizon.
If I am correct in my thinking, this will be wave ‘iii’, of (iii) of 3.
So the downside potential is large given the setup.
We could get another rise into the 50% retracement level to complete wave ‘ii’ brown.
So, the key level for me is 1.0504,
I am looking to test the market with a short position at that level.
My Bias: Long towards 1.2900
Wave Structure: Zigzag upside correction
Short term wave count: Upside from 1.1800 – 1.2080, Upper target 1.3400
Long term wave count: Rally in wave (4) blue, Upper target 1.3400
Important risk events: GBP: N/A USD: N/A
Cable rallied in a pretty impulsive looking fashion today, but this could well be a corrective rally in the context of the alternative wave count.
The high at 1.2470 holds three important attributes.
It is the high of the previous wave A red.
It is bang on the 50% retracement level of the previous decline
And it is close to the previous 4th wave.
All this adds up to a good area for a reversal.
I am watching close for signs of that to happen.
Given the setup in EURUSD, It would be foolish to disregard the alternate count here.
Current wave [iv] – Short to 108.00
My Bias: short to 106.00
Wave Structure: rally in wave [C]
Short term wave count: wave [iii] grey
Long term wave count: wave [C] is underway, upside to above 136.00
Important risk events: JPY: N/A USD: N/A
The low in USDJPY did poke through the previous high wave i high and has rallied impulsively since.
I have shown another interpretation of the short term wave count which accounts for that.
The wave ‘i’ label has been dropped to the lower peak at 115.61.
That means wave ‘ii’ was an expanded flat and wave ‘iv’ is a combination correction.
This wave count allows for one more high into the 119 level.
But be advised, this is the last bullish setup that I can see, the tables are likely turning in USDJPY from nearby levels.
DOW JONES INDUSTRIALS
Wave [ii] possibly underway
My Bias: Long towards 21,000
Wave Structure: Impulsive 5 wave structure, possibly topping in an all time high.
Short term wave count: Upside from 17,066 wave 4 blue
Long term wave count: Topping in wave (5)
Important risk events: USD: N/A
The DOW has taken another hit today, down 160 points at the lows.
This fits well with the wave count I have been showing all week.
the upper trend line of the channel held the price well today, which adds to the bearish outlook.
This decline can be viewed as an unfolding wave 1 red to the downside.
Once a completed five/ three wave structure to the downside is complete, it will be time to start testing to the downside.
Current wave [B] – Long to 1550
My Bias: Long towards 1550
Wave Structure: ZigZag correction to the upside.
Short term wave count: Upside from 1120~, target 1550
Long term wave count: Topping in wave (B) at 1550
Important risk events: USD: N/A
The Gold price came off the boil today, and may be presenting a long opportunity.
The price broke up through the previous resistance at wave 1 blue.
This increases the probability that a reversal is on the cards here.
The price is now resting on that 1150 level, and I want to see it hold above 1135 to keep the bullish wave count options open
The invalidation point for the bullish outlook lies at 1125.
Have a great weekend.